Brother died intestate; massive debts; need advice

[Jux]

My brother died suddenly last year. He owned a ground floor, one bed flat, 2 minutes' walk from Clapham Junction station. It is in a dreadful state, needs doing up badly, new bathroom suite, deep cleaning everywhere, etc.

He also had massive debts.

The solicitors who are dealing with it say they are near completing and will have the letters of Administration soon. However, in order to pay off the debts we need to find 175K. Obviously, the flat could be sold for more than this, even in its current state. DH, however, is insisting that we get in there, sort it out for about 15K and reap up to another 50K when we sell it.

I have no idea if we're even allowed to do this. ATM the flat doesn't belong to us, it belongs to my bro's estate. The solicitors have very kindly given me permission to stay overnight in there when I come down from Devon to see to things.

The other thing is I don't want to sell it at all (it is making me cry to think about it, I know I have to get over this though). DH has a friend who has had to wind up the estates of 3 of his elderly relatives, and who has told dh that credit card debts die with you - you don't have to pay them back. Much of my bro's debt is to credit cards. Do we have to pay them back? This would reduce the amount owed by a certain amount.

Neither my elder bro nor I can get a mortgage for 175K. Elder bro has investigated and says a: it's over 3 times his salary (fair enough, I wouldn't want to borrow more than that), b: he is over 50 and therefore mortgage companies want 40% deposit.

There's no way a mortgage co. would be nicer to me - disabled, non-working, over 50, don't make me laugh!

Any ideas of what we can do?

Sorry this is a bit tangled; I am upset.

Careful of the inheritance tax, I don't know when it kicks in.

It depends on whether you can get the funds to get a mortgage for it. We have a mortgage advice bureau here, they go through the different ranges of mortgages availiable in a client's circumstances. Do you have other family members? You could try a guarantor mortgage?

How much needs doing to it?

Loads and loads. He tried to put up a shower but there's a hole in the wall, and another where he tried to put it up again or took down the old one. The basin is broken and leaks. The whole place needs a deep clean, repainting, new bathroom suite, white goods, check out the heating (radiators don't seem to work), etc. Most rooms have wires hanging down from the ceiling instead of lights. He had torches placed strategically around, and little lamps plugged in everywhere. Carpets must be ditched. Kitchen needs replastering. Gas is disconnected though I don't know why - may be he simply didn't cook, but he's got a microwave on top of the hob and a strange glass bowl thing which purports to be an oven.

We know a good builder guy who could project manage it all and would know other good guys like plumbers etc.

We want to remove the kitchen sink as it is very nice old china Belfast(?), but kitchen cupboards are original 30s but need fumigating probably.

Curtains, curtain rails blah blah. Have rent unfurnished probably. His stuff is fit for the dump (huge hole in seat of sofa which you can literally fall through); only other stuff is old family very antique do not touch type of stuff.

Ah, the glass bowel thing is a cooker, my mother has one (halogen or something or other maybe), can use it as an oven and is more energy efficient for cooking small amounts.

Antique furniture is classed as part of the estate. Your solicitor should have made an invetory and list of assets/liabilities?

I'm not a legal bod - but could you and your BB not raise the money between you to pay off he debts, then when the flat is yours you would then be free to do it up/keep/sell/do what you like with? Hope it all works out.

Big Bro has the papers; gave them to him by mistake. Have asked him to e-mail me figures. Have told him I am not going to instruct sols to sell for the moment even though we're racking up mortgage payments L R and C. Could probably pay off IRS with inheritance from mum, prob pay off other important stuff, but I need those figures from him so I can see how much.

If mortgage is about 133k then other debts amount to 42K. Pretty sure BB could get mortgage for 133K and we could pay off most of the 42K from inheritance from mum, but I've been told that on no account should I pay the credit cards. Just can't remember how much they come to or what else/who else he owed.

I don't think inheritance tax will come into it. If mum was below the threshold, and she was, then so he must be.

The antique furniture isn't his, or mine, or even my mum's. It's Family Furniture (The Clan) and belongs to none of us, but we are allowed to keep it in our houses, as it were. In fact, none of it was in LB's flat, it's just that that's all I'd have to furnish it with if we were to need to furnish it at all, iyswim.

Leslaki, I am thinking along those lines atm, but am not sure what the debt-minus-mortgage figure is and who it's to. See above comment about credit cards.

Ok. I think you need to get hold of all the papers so you can see what the assets/liabilities are. I'll look into whether the mortgage on the flat should be paid, I think this should be on hold as all of his assets/liabilities should be frozen. Has the mortgage company been advised of his death? Inheritance tax comes into play on estates over 325,000 and is 40%, any liabilities will be deducted first though so you may escape this. The solicitor should have put an advert in the local paper to find out if anyone else was owed money. You don't need to pay the credit cards at the moment, they are on hold and interest is frozen at 0%. I really would write to them asking for a copy of the contracts and a breakdown of costs. I would then delve into his income to see if he was able to meet all of the repayments, it's wreckless lending otherwise and could work out in your favour.

You are more then welcome to email me if there's anything you need. I don't work in Law any more, I have a degree in Law but am not a solicitor. If I can point you in the right direction so you can ask the right questions then I am more then happy to help.

Did have life insurance that would pay out to cover the mortgage if he died? Long shot as probably didn't if he had no dependents. But worth checking?

I am awaiting response from BB re the breakdown of assets/liabilities - they sent it to me as I'm supposed to be dealing with it, but I gave them to BB by mistake.

I told the mortgage co of his death about 3 wks later, as they were sending repossession letters. He owed about 3 months' payments. Not a chance that he had life insurance; suspect he only had the two credit card insurances because he'd forgotten he'd arranged them!

I think it could have been wreckless lending for some things as his finances were in the most terrible state. It was costing him over 3K a month to live, and he was on the point of selling the flat to a developer. He was going to rent a large studio nearby where he could carry on with the recording and producing and live there on the sly.

Fluffy, thank you so much for the offer. I will contact you when I get the figures from BB. Otherwise, the solicitors have pretty well everything, though I've got a tiny bit of stuff which dh picked up when he was down a couple of weeks ago.

He's going down again to clear out the big storage unit so we can fill up our house with even more stuff! It's like an obstacle course here

I've spoken to the solicitor today.

They advertised in local papers a few months ago and nothing new has come in response.

They decided very early on that they would almost certainly be filing for an 'insolvent estate'.

They think the flat could be sold to us )the beneficiaries) for as little as 150K. They have asked for probate and expect final response next week.

The solicitor I spoke to wasn't keen on talking about refurb etc until she receives the probate and will send me papers for signature, and more figures then.

I have been told that I could get a buy to let mortgage for 70% of the current value of the flat. This is not dependent upon income, but I would have to know how much the repayments were before I could consider it, also somehow get a valuation which makes 70% equal 150K!

I had a scary conversation with BB. He has said he would do anything for me. He doesn't say things like that. The degree of his love and care for me is frightening.

Hello Jux

I landed on here cos I posted something about advertising a death in the local paper, and found your quest most interesting. You've probably sort it all out now, but how did it turn out? I'm hoping you managed to buy the flat, are well on with the improvements and looking forward to some tenants. I thought it seemed a sensible move, and I'm not one to take risks myself. Do be aware that as a second property/business asset you'll likely be liable for capital gains tax when you sell it, but it sounds like it could be a good investment.

Best wishes

Madmeg